LXFR 10-K & 10-Q changes, risk factors and insider trading
Luxfer Holdings Plc · NYSE · Industrial Inorganic Chemicals · CIK 1096056 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We depend on certain end-markets, and downturns or regulatory changes in those markets could adversely affect our sales, pricing and margins”
New heading “Our reliance on major customers increases exposure to reductions in demand, loss of business and credit risk”
New heading “Volatility in raw material and energy costs, and limitations on passing through cost increases, could adversely affect margins and working capital”
New heading “Fluctuations in foreign exchange rates could adversely affect reported sales, earnings, cash flows and net assets”
New heading “Our defined benefit pension obligations and related regulatory requirements could require additional funding and adversely affect our financial position and cash flows”
New heading “The U.K. Pensions Regulator has statutory powers that could impose additional liabilities and restrict corporate activity”
New heading “Environmental laws and liabilities could require significant costs and adversely affect our financial position and results”
New heading “Health and safety regulations expose us to compliance costs and potential liabilities from workplace incidents”
New heading “Regulatory approvals, certifications and export controls could limit our ability to sell products, enter markets or expand operations”
New heading “Climate change regulation and evolving disclosure requirements could increase costs and expose us to legal, operational and reputational risks”
New heading “Product liability, warranty and recall risks could result in significant costs, litigation and reputational harm”
New heading “Cybersecurity threats, data breaches and evolving disclosure obligations could disrupt operations and expose us to legal and financial risk”
New heading “Legacy liabilities from previously owned or divested businesses could result in future claims and financial exposure”
New heading “Risks associated with products, technology and intellectual property”
New heading “Our ability to protect intellectual property and proprietary information affects our competitive position and profitability”
New heading “Dependence on third-party intellectual property and potential infringement claims could disrupt operations and increase costs”
New heading “Our performance depends on continued research, development and successful innovation”
New heading “We may pursue acquisitions, which involve integration challenges, financial risks and uncertainty regarding expected benefits”
New heading “Fraud, control failures or errors in finance processes could result in financial loss, misstatement and regulatory exposure”
New heading “Business interruptions at our production facilities could disrupt operations and adversely affect results and cash flows”
New heading “Labor relations and reliance on unionized workforces could disrupt operations and increase costs”
New heading “We depend on distributions from subsidiaries to meet obligations, and restrictions could limit our ability to fund operations or dividends”
New heading “Our indebtedness and financing arrangements could limit flexibility and expose us to refinancing and interest rate risk”
New heading “Future dividends are at the discretion of our Board and may be reduced or suspended based on financial and legal constraints”
New heading “Compliance with U.S. securities laws and internal control requirements could result in increased costs and expose us to reporting and control risks”
New heading “Our incorporation outside the United States and the location of certain directors, officers and assets may make it difficult to enforce U.S. judgments”
Removed heading “Our operations rely on a number of large customers in certain areas of our business, and the loss of any of our major customers could negatively impact our results of operations.”
Removed heading “We are exposed to fluctuations in the costs of the raw materials that are used to manufacture our products, and such fluctuations could lead us to incur unexpected costs and could affect our margins and / or working capital requirements.”
Removed heading “Changes in foreign exchange rates could reduce profit margins on our sales and reduce the reported sales of our non-U.S. operations and have a material adverse effect on our results of operations.”
Removed heading “Our defined benefit pension plans have historically fluctuated between funding deficits and surpluses and are exposed to market forces that could require us to make increased ongoing cash contributions in response to changes in market conditions, actuarial assumptions and investment decisions These market forces could expose us to significant short-term liabilities if a wind-up trigger occurred in relation to such plans, each of which could have a material adverse impact on our results of operations and financial position.”
Removed heading “The Pensions Regulator in the U.K. has the power in certain circumstances to issue contribution notices or financial support directions that, if issued, could result in significant liabilities arising for us.”
Removed heading “Our operations may prove harmful to the environment resulting in reputational damage and clean-up or other related costs.”
Removed heading “Certain aspects of our operations are highly regulated by different agencies that require products to comply with their rules and procedures and can subject our operations to penalties or adversely affect production.”
Removed heading “We are subject to legislation and regulations to reduce carbon dioxide and other greenhouse gas emissions.”
Removed heading “Due to the nature and use of the products that we manufacture, we may in the future face large liability claims.”
Removed heading “We are exposed to risks related to cybersecurity threats and general information security incidents which may also expose us to liability under data protection laws, including the GDPR.”
Removed heading “We could incur future liability claims arising from previous businesses now closed or sold.”
Removed heading “Risks associated to new and existing products”
Removed heading “Our ability to remain profitable depends on our ability to protect and enforce our intellectual property, and any failure to protect and enforce such intellectual property could have a material adverse impact on our results of operations and financial position.”
Removed heading “Expiration or termination of our right to use certain intellectual property granted by third parties, the right of those third parties to grant the right to use the same intellectual property to our competitors, and the right of certain third parties to use certain intellectual property used as part of our business, could have a material adverse impact on our results of operations, financial position and cash flows.”
Removed heading “If third parties claim that intellectual property used by us infringes upon their intellectual property, our operating profits could be adversely affected.”
Removed heading “Any failure of our research and development activity to improve our existing products and develop new products could cause us to lose market share.”
Removed heading “Increased climate control regulation could negatively impact sales of our products.”
Removed heading “We may not be able to consummate, finance or successfully integrate future acquisitions into our business, which could hinder our strategy or result in unanticipated expenses, losses or charges.”
Removed heading “Our businesses could suffer if we lose certain employees or cannot attract and retain qualified employees.”
Removed heading “We could suffer a material interruption in our operations as a result of unforeseen events or operating hazards, including severe weather events linked to climate change.”
Removed heading “As a holding company, Luxfer Holdings PLC's main source of cash is distributions from our operating subsidiaries.”
Removed heading “We have a level of indebtedness which has reduced over time, but could adversely affect our cash flows and our ability to operate our business, remain in compliance with debt covenants, make payments on our indebtedness, pay dividends and respond to changes in our business or take certain actions.”
Removed heading “Our ability to pay regular dividends on our ordinary shares is subject to the discretion of our Board of Directors and will depend on many factors, including our results of operations, cash requirements, financial position, contractual restrictions, applicable laws and other factors, and may be limited by our structure and statutory restrictions and restrictions imposed by the Revolving Credit Facility and the Loan Notes, as well as any future debt facilities.”
Removed heading “If we fail to establish or maintain an effective system of internal controls, we may be unable to accurately report our financial results or prevent fraud, and investor confidence and the market price of our ordinary shares may, therefore, be adversely impacted.”
Removed heading “It may be difficult to effect service of U.S. process and enforce U.S. legal processes against the directors of Luxfer.”
Largest changes
“Cybersecurity incidents may result in business disruption, the misappropriation, corruption or loss of confidential information (including personally identifiable information) and critical data (ours or that of third parties), reputational damage, litigation with third parties, regulatory fines, diminution in the value of our investment in research and development and data privacy issues and increased information security protection and remediation costs. …”see in full comparison
“Trade policy volatility has already affected our operations. For example, tariffs and other trade measures between the U.S. and China, as well as broader restrictions affecting certain metals, rare earth materials and industrial inputs, have increased input costs and created supply chain uncertainty in recent periods. These measures have also required pricing actions, alternative sourcing strategies and, in some cases, increased working capital to secure supply. …”see in full comparison
“The Pensions Regulator may issue a contribution notice to the employers that participate in the Luxfer Group Pension Plan, or any person who is connected with, or is an associate of, these employers where the Pensions Regulator is of the opinion that the relevant person has been a party to an act, or a deliberate failure to act, which had as its main purpose (or one of its main purposes) the avoidance of pension liabilities or where such act has a materially detrimental effect on the likelihood of payment of accrued benefits under the Luxfer Group Pension Plan being received. …”see in full comparison
“Our indebtedness could have important consequences. For example, it could make it more difficult for us to satisfy obligations with respect to indebtedness, and any failure to comply with the obligations of any of our debt instruments, including financial and other restrictive covenants, could result in an event of default under agreements governing our indebtedness. …”see in full comparison
“Product liability, warranty and recall risks could result in significant costs, litigation and reputational harm”see in full comparison
“Our production facilities are located in a number of different locations around the world. Any of our facilities could suffer an interruption in production, either at separate times or at the same time, because of various and unavoidable occurrences. …”see in full comparison
Full comparison: every changed paragraph (183)
We depend on certain end-markets, and downturns or regulatory changes in those markets could adversely affect our sales, pricing and margins
We depend on certain end-markets, including automotive, alternative fuels, self-contained breathing apparatus ("SCBA"), aerospace, defense, healthcare, oilhealthcare and gasoil. Demand in these end-markets is influenced by macroeconomic conditions, customer inventory cycles, availability of credit, energy costs, government procurement cycles and printingregulatory change including the trade policy and paper.tariff Anenvironment. economic downturn, or regulatory changes, inIf any of thosethese end-markets,end-markets couldexperience reducea downturn, prolonged weakness, or adverse regulatory developments, our sales volumes, pricing and profit margins could be materially and adversely affected. Dependence of either of our segments on thosecertain end-markets.end-markets may be more pronounced, and it is possible that multiple end-markets could weaken at the same time.
We have significant exposures to certain end-markets, including some end-markets that are cyclical in nature or subject to high levels of regulatory control, including automotive, SCBA, aerospace and defense. Dependence of either of our segments on certain end-markets is even more pronounced.
To the extent that any of these cyclical end-markets are in decline, at a low point in their economic cycle, or subject to regulatory change, sales and margins on those sales may be adversely affected. It is possible that all or most of these end-markets could be in decline at the same time, i.e. during an economic downturn. Any significant reduction in sales could have a material adverse impact on our results of operations, financial position and cash flows.
Our global operations expose us to economicgeopolitical, conditions,regulatory, potentialtrade and tax costs,risks politicalthat riskscould adversely affect our business and specific regulations or restrictions in the countries in which we operate, which could have a material adverse impact on ourfinancial results of operations, financial position and cash flows.
Our global operations expose us to economic conditions, potential tax costs, political risks and specific regulations or restrictions in the countries in which we operate, which could materially and adversely impact our results of operations, financial position and cash flows.
We derive our sales and earnings from operations in manymultiple countries and are subject to risks associated with doing business internationally. We have wholly-owned operations in the U.S., the U.K., Canada and China, as well as a joint venture in Japan. DoingRisks businessof inoperating differentinternationally countries has risks, including the potential forinclude adverse changes in the local,political, social, political,financial, financialeconomic or regulatory climate,conditions; difficulty in staffing and managing geographically diverse operations,operations; and the costs of complying with a variety oflocal laws and regulations. For example, the potential implementation of tariffs on imports suggested by U.S. President Donald Trump on Canadian, Mexican, Chinese and European products would mean that our results could be affected through a rise in costs. There is the potential for tariffs to expand further, e.g. between the U.S. and the U.K. and Europe, which could impact movement of goods. In 2024, for third party revenue, we made a combined $22.9 million of sales from Canada and the U.K. to the U.S., with no sales from China to the U.S.. The U.S. in return made combined sales of $24.8 million to Europe (EU countries), U.K., Canada, and China. The total exposure across the group is therefore a combined $47.7 or 12.2% of sales.
Trade policy volatility has already affected our operations. For example, tariffs and other trade measures between the U.S. and China, as well as broader restrictions affecting certain metals, rare earth materials and industrial inputs, have increased input costs and created supply chain uncertainty in recent periods. These measures have also required pricing actions, alternative sourcing strategies and, in some cases, increased working capital to secure supply. Future changes — including additional tariffs, retaliatory measures, quotas, customs enforcement actions, sanctions or export controls — could further increase our costs, disrupt supply chains, reduce demand and/or require operational changes on short notice. Changes in trade measures between major trading regions could materially and adversely affect our results of operations, financial position and cash flows because our supply chains and customer base are global.
We are also subject to taxes in multiple jurisdictions. Our tax burden depends on the interpretation and application of local tax laws, administrative practices and treaties. Changes in tax laws, tax authority interpretations, audit positions, or the geographic mix of earnings could increase our tax expense, cash taxes and/or effective tax rate and could materially and adversely affect our results of operations, financial position and cash flows.
Our reliance on major customers increases exposure to reductions in demand, loss of business and credit risk
Due to the fact we have operations in many countries, we are also liable to pay taxes in many fiscal jurisdictions. Our tax burden depends on the interpretation of local tax regulations, bilateral or multilateral international tax treaties and the administrative doctrines in each jurisdiction. Changes in these tax regulations may increase our tax burden, or otherwise affect our accounting for taxes. For example, in March 2021, the U.K. government announced an increase in the statutory rate of Corporation tax from the current 19% to 25%, which became effective in April 2023, and increased the tax burden on earnings from our U.K. operations.
The principal markets for our products are located in North America, Europe and Asia, and any financial difficulties experienced in these markets may have a material adverse impact on our businesses. For example, the maturity of some of our markets, could require us to increase sales in developing regions, which may involve greater economic and political risks. We cannot provide any assurances that we will be able to expand sales in these regions. Any of these factors could have a material adverse impact on our results of operations, financial position and cash flows.
Our operations rely on a number of large customers in certain areas of our business, and the loss of any of our major customers could negatively impact our results of operations.
IfOur weoperations failrely toon maintaina number of large customers in certain areas of our relationshipsbusiness, withand ourthe loss of any major customers,customer, a reduction in demand by a major customer, or faila tocustomer replacepayment lost customers, or if there is reduced demand from our customers or for products produced by our customers, such failures or reduced demanddefault could materially reduce our sales. In addition, we could experience a reduction in sales ifand any of our customers fail to perform or default on any payment pursuant to our contracts with them.profitability. Long-term relationships with customers are especially important forbecause suppliers of intermediate materials and components such as ourselves. Wewe often work closely with customers to develop products thatto meet particular specifications as part of the design of a product intended for an end-user market. The bespoke nature of many of our products could make it difficult to replace lost customers. Our top 10 customers accountedquickly, forand approximatelythe 39%loss of our net sales in 2024. Anya significant reduction in sales or customer payment default could havematerially anand adverse materialadversely impact on our results of operations, financial position and cash flows.
Our top 10 customers accounted for approximately 38% of our net sales in 2025. Any significant reduction in sales or customer payment default could materially and adversely affect our results of operations, financial position and cash flows.
We rely to varying degrees on major suppliers for raw materials and components used in our engineered products, including aluminum, zirconium, magnesium, carbon fiber and rare earths. We generally purchase raw materials on a spot basis under standard terms and conditions and also maintain certain supply arrangements for key inputs. Supply disruptions, supplier financial distress, geopolitical events, trade restrictions, export controls, transportation constraints, or natural disasters could limit availability, increase lead times and raise costs. For example, our Elektron segment requires certain rare earth metals and oxides typically sourced from China for use in the manufacture of some magnesium alloys and in zirconium catalysts. The supply of these materials is subject to geopolitical, regulatory and trade risks, including export controls, licensing requirements and other government-imposed restrictions, the combined impact of which since the first half of 2025 has resulted in reduced availability and increased cost.
We rely, to varying degrees, on major suppliers for some of the principal raw materials of our engineered products, including aluminum, zirconium and carbon fiber.
We generally purchase raw materials from suppliers on a spot basis under standard terms and conditions. We also enter into supply contracts with Rio Tinto Alcan for a substantial portion of our aluminum requirements. In addition, we have supply contracts in place with U.S. Magnesium for raw material purchases of magnesium ingot for both military and commercial applications, although given the force majeure previously declared by U.S. Magnesium LLC, and the current idling of the plant, we do not know when or if we will be able to recommence the magnesium ingot purchases with this supplier. However, we were able to successfully secure magnesium from alternative sources to meet requirements for both military and commercial applications for 2024 and into 2025.
An interruption in the supply of essential raw materials usedor in our production processescomponents, or ana significant increase in the costs of raw materials due to market shortages, supplier financial difficulties, government quotas or naturalother disturbances,disruptions, could significantly affect our ability to provide competitively priced products to customers in a timely manner. For example, the significant increase in demand for materials and energy has resulted in significant constraints on availability of key inputs such as magnesium, aluminum and energy supplies with a consequent spike in prices. In the event of a significant interruption in the supply of any materials used in our production processes, or a significant increase in their prices,constraints, we may haveneed to purchase these materials from alternative sources,sources build(potentially at higher prices), carry additional inventory of raw materials,inventory, increase our prices, reduce our margins or possibly fail to fillmeet customerdelivery orders by deadlines required in contracts,requirements, which could result in, amongst other things,in contractual penalties.penalties, loss of customer confidence and reduced future demand. We cancannot provide no assuranceassure that wereplacement materials would be able to obtain replacement materialsavailable quickly on similar terms or at all. FailureA to maintain relationships with key suppliersprolonged or tomaterial developdisruption relationshipsin withthe alternativeavailability suppliersof raw materials could havematerially aand materialadversely adverse effect onaffect our results of operations, financial position and cash flows.
Volatility in raw material and energy costs, and limitations on passing through cost increases, could adversely affect margins and working capital
We are exposed to fluctuations in raw material and energy costs, including electricity and natural gas used in our manufacturing processes. We may not be able to pass cost increases through to customers immediately or at all due to fixed-price arrangements, competitive pressures or customer resistance. Significant increases in raw material or energy costs could reduce margins and/or increase working capital requirements, and higher input costs could make our products less attractive compared to alternatives (including competing products made from other materials), which could materially and adversely affect our results of operations, financial position and cash flows.
We are exposed to fluctuations in the costs of the raw materials that are used to manufacture our products, and such fluctuations could lead us to incur unexpected costs and could affect our margins and / or working capital requirements.
Fluctuations in the costs of raw materials could affect margins and working capital requirements in the businesses in which we use them, see ITEM 7A. We cannot always pass on cost increases or increase our prices to offset these cost increases immediately or at all, whether because of fixed-price agreements with customers, competitive pressures that restrict our ability to pass on cost increases or increase prices, or other factors. It can be particularly difficult to pass on cost increases or increase prices in product areas such as gas cylinders, where competitors offer similar products made from alternative materials, such as steel, if those materials are not subject to the same cost increases. Higher prices necessitated by large increases in raw material costs could make our current or future products unattractive compared to competing products made from alternative materials that have not been so affected by raw material cost increases, or compared to products produced by competitors who have not incurred such large increases in their raw material costs. If, for example, the cost of aluminum or carbon fiber were to rise, we may not be able pass those cost increases on to our customers.
We are not dependent on any one supplier for our primary raw materials, but the business could be impacted by supply constraints. If, in the future, we are unable to obtain sufficient amounts of material on a timely basis, we may not be able to obtain raw materials from alternate sources at competitive prices. In addition, interruptions or reductions in our supply of raw materials could make it difficult to satisfy our customers’ delivery requirements, which could havematerially aand materialadversely adverse effect onaffect our business, financial condition, results of operations and cash flows.
Fluctuations in foreign exchange rates could adversely affect reported sales, earnings, cash flows and net assets
Changes in foreign exchange rates could reduce profit margins on our sales and reduce the reported sales of our non-U.S. operations and have a material adverse effect on our results of operations.
We conduct a large portion of our commercial transactions, purchases of raw materials and sales of goodstransactions in various countries and regions, including the U.S., the U.K., continental Europe, Australia and Asia. Our manufacturing operations based in the U.S. and Asia usually purchase raw materials and sell goods denominated in their local currency, but our manufacturing operations in the U.K. often purchase raw materials and sell products in differentmultiple currencies. Changes in theexchange relativerates valuescan ofreduce currenciesreported sales and earnings from non-U.S. operations and can decrease the profits of our subsidiaries when theythat incur costs in currencies that are different from the currencies in which they generate all or part of their revenue. These transaction risks principally arise as a result of purchases of raw materials in U.S. dollars, coupled with sales of products to customers in euros. This impact is most pronounced in our exports to continental Europe from the U.K. In 2024,2025, our U.K. operations sold approximately €4739 million of goods into the Eurozone. Our policy is to hedge a portion of our net exposure to fluctuations in exchange rates with forward foreign currency exchange contracts. Therefore, we are exposed to market risk and credit risk through the use of derivative financial instruments. Moreover, any failure of hedging policies could negatively impact our profits, and thus damage our ability to fund our operations and to service our indebtedness.
In addition to subsidiaries in the U.S.,addition, we have operating subsidiaries located in the U.K., Canada, China and Australia, as well as a joint venture in Japan, each of whose revenue, costs, assets and liabilities are denominated in local currencies. As our consolidated financial statements are reported in U.S. dollars, we are exposed to fluctuations in those currencies when those amounts are translated to U.S. dollars for purposes of reporting our consolidated financial statements, which may cause declines in results of operations. The largest risk is from our operations in the U.K., which, in 2024,2025, generated an operating profit of $10.7$4.1 million and sales of $126.7$109.7 million. Fluctuations in exchange rates, particularly between the U.S. dollar and GBP sterling (which has been subject to significant fluctuations, as described above), can have a material effect on our consolidated income statement and consolidated balance sheet. In 2024, movements in the average U.S. dollar exchange rate had a positive impact impact on net sales of $3.7 million. In 20232025, movements in the average U.S. dollar exchange rate had a positive impact on net sales of $2.8$4.3 million. In 2024 movements in the average U.S. dollar exchange rate had a positive impact on net sales of $3.7 million. Changes in translation exchange rates decreasedincreased net assets by $12.6 million in 2025, compared to a decrease of $4.6 million in 2024, compared to an increase of $7.3 million in 2023.2024.
We use forward foreign currency exchange contracts to hedge portions of certain exposures, but hedging may not fully offset currency impacts and exposes us to market and credit risk, including counterparty risk. Currency volatility could materially and adversely affect our results of operations, financial position and cash flows.
These foreign exchange risks could have a material adverse effect on our results of operations, financial position and cash flows. For additional information on these risks, and the historical impact on our results, see ITEM 7A.
Our defined benefit pension obligations and related regulatory requirements could require additional funding and adversely affect our financial position and cash flows
Our defined benefit pension plans have historically fluctuated between funding deficits and surpluses and are exposed to market forces that could require us to make increased ongoing cash contributions in response to changes in market conditions, actuarial assumptions and investment decisions These market forces could expose us to significant short-term liabilities if a wind-up trigger occurred in relation to such plans, each of which could have a material adverse impact on our results of operations and financial position.
We have defined benefit pension arrangements in the U.K. and in the U.S.. In 2023, the Company completed a buyout of the U.S. BA Holdings, Inc. Pension Plan with our remaining U.S. plan being immaterial,immaterial (see ITEM 8, Note 15.15). Our largest defined benefit plan, the Luxfer Group Pension Plan, ('the Plan') which closed to new members in 1998, remained open for accrual of future benefits based on career-average salary until April 5, 2016. However, followingFollowing a consultation, it was agreed with the Trustees and plan members to close the Luxfer Group Pension Plan in the U.K. to future benefit accrual of benefits, effective from April 5, 2016. Moreover,In addition, when increasing pension benefit payments, it was agreed to use the CPI as the reference index,index in place of the RPI where applicable. The Luxfer Group Pension Plan is funded according to the regulations in effect in the U.K. and, as of December 31, 2024, and December 31, 2023, had an accounting surplus of $49.3 million and $40.3 million, respectively. There is no guarantee that the surplus funding position will be maintained and adverse market movements could result in a reversion to a deficit funding position. According to the latest triennial actuarial valuation of the Luxfer Group Pension Plan as of March 31, 2024, the Luxfer Group Pension Plan had a surplus of £20.8 million (reduced from £12.2 million deficit at the previous valuation in April 2021). Should a wind-up trigger occur in relation to the Luxfer Group Pension Plan, the buy-out surplus of that plan will become due and payable or receivable by the employers. The aggregate surplus of the Luxfer Group Pension Plan on a buy-out basis was estimated at £8.0 million as of March 31, 2024 (reduced from £86.0 million deficit in April 2021). The Trustee has the power to wind-up the Luxfer Group Pension Plan if it determines that in the best interests of members, there is no reasonable purpose in continuing the Luxfer Group Pension Plan.
The Plan is funded in accordance with U.K. regulatory requirements and, as of December 31, 2025, and December 31, 2024, had an accounting surplus of $54.9 million and $49.3 million, respectively. There is no guarantee that the surplus funding position will be maintained and adverse market movements could result in a reversion to a deficit funding position. According to the latest triennial actuarial valuation of the Plan as of March 31, 2024, the Plan had a surplus of £20.8 million. No contributions were made to the Plan during 2025 or 2024. Based on the most recent actuarial valuation and the associated funding agreement with the Trustee, the Plan was not subject to deficit recovery contributions during this period. The Trustee may request additional contributions, and the U.K. Pensions Regulator (“TPR”) has the power to require further funding in certain circumstances. We remain legally responsible for ensuring that the Plan has sufficient assets to meet its obligations as they fall due.
Subsequent to year end, in January 2026, the Trustees completed a full buy-in transaction with a U.K. insurer, substantially matching the Plan’s benefit obligations with corresponding cash-flow payments. While this transaction significantly reduces the Plan’s exposure to investment and funding risks, the Company remains legally responsible for the Plan and subject to applicable regulatory requirements. The buy-in is designed to substantially match the Plan’s benefit obligations with corresponding cash flow payments from the insurer, with effect from March 2026, in exchange for an agreed premium. As this transaction occurred after the balance sheet date, the measurement of the Plan’s assets or liabilities as of December 31, 2025 did not account for this event. The buy-in does not constitute a settlement event under ASC 715 which would trigger settlement accounting.
Pension obligations and related cash requirements are sensitive to market conditions, actuarial assumptions (including discount rates, inflation and longevity), asset performance, regulatory developments and trustee decisions. While the buy-in has reduced exposure to many of these risks, adverse developments could still result in increased funding or security requirements and could materially and adversely affect our results of operations, financial position and cash flows.
No contributions were made to the plan during 2024 and 2023. The Trustee can request additional contributions, and the U.K. Pensions Regulator ("TPR") has the power to order further funding in the current three-year window should increasingly stringent regulation require it (see Environmental and regulatory risks: The Pensions Regulator in the U.K. has the power in certain circumstances to issue contribution notices or financial support directions that, if issued, could result in significant liabilities arising for us). We remain legally responsible and committed to ensuring that the Luxfer Group Pension Plan has the funding required to meet its liabilities as they fall due.
In 2021, the Company decided to terminate its U.S. Pension Plan. The Company completed the buyout of the U.S. plan in the first quarter of 2023. As a result, a final premium totaling $29.3 million was paid to settle the liabilities.
We are exposed to various risks related to our defined benefit plans, including the risk of loss of market value of the plan assets, the risk of actual investment returns being less than assumed rates of return, the Trustees of the Luxfer Group Pension Plan switching investment strategy (which requires consultation with the employer), and the risk of actual experience deviating from actuarial assumptions for such things as mortality of plan participants. In addition, fluctuations in interest rates cause changes in the annual cost and benefit obligations, and increasingly stringent regulation can further increase the financial burden. Any of these risks could have a material adverse impact on our results of operations, financial position and cash flows.
The U.K. Pensions Regulator has statutory powers that could impose additional liabilities and restrict corporate activity
The U.K. Pensions Regulator has wide statutory powers that could, in certain circumstances, result in significant additional liabilities for the Group and restrict our ability to undertake corporate transactions.
The Pensions Regulator may issue a contribution notice or a financial support direction to participating employers in the Plan, other Group companies, or persons connected with or associated with those employers. Such action may be taken where an act or omission is considered to have avoided pension liabilities, materially weakened the likelihood of accrued benefits being paid, or where an employer is deemed to be insufficiently resourced. Any resulting liability may be as high as the difference between the pension plan’s assets and the cost of securing members’ benefits on a buy-out basis.
The Pension Schemes Act 2021 further expanded these powers, introducing new criminal and civil penalties (including unlimited fines) and additional notifiable-events requirements for certain corporate transactions. In practice, these powers may limit our ability to restructure the Group, dispose of businesses, or pay dividends, and may require us to provide additional funding or security to the pension plan. Any such requirements could materially and adversely affect our financial position, cash flows and results of operations.
Environmental laws and liabilities could require significant costs and adversely affect our financial position and results
Our operations are subject to environmental laws and regulations in the jurisdictions in which we operate. These regulations impose standards relating to emissions, wastewater discharges, hazardous materials handling, waste disposal, and soil and groundwater conditions, among other matters. Compliance requires ongoing costs, and we may incur liabilities for remediation and other obligations, including relating to historical activities and divested assets. We cannot assure that reserves, insurance or remediation plans will be adequate. Environmental liabilities, compliance failures or adverse regulatory changes could materially and adversely affect our results of operations, financial position and cash flows.
Health and safety regulations expose us to compliance costs and potential liabilities from workplace incidents
The Pensions Regulator in the U.K. has the power in certain circumstances to issue contribution notices or financial support directions that, if issued, could result in significant liabilities arising for us.
The Pensions Regulator may issue a contribution notice to the employers that participate in the Luxfer Group Pension Plan, or any person who is connected with, or is an associate of, these employers where the Pensions Regulator is of the opinion that the relevant person has been a party to an act, or a deliberate failure to act, which had as its main purpose (or one of its main purposes) the avoidance of pension liabilities or where such act has a materially detrimental effect on the likelihood of payment of accrued benefits under the Luxfer Group Pension Plan being received. A person holding alone or together with his or her associates, directly or indirectly, one-third or more of our voting power, could be the subject of a contribution notice. The terms "associate" and "connected person," which are taken from the Insolvency Act 1986, are widely defined and could cover our significant shareholders and others deemed to be shadow directors. If the Pensions Regulator considers that a plan employer is "insufficiently resourced" or a "service company" (which terms have statutory definitions), it may impose a financial support direction requiring such plan's employer or any member of the Group, or any person associated or connected with an employer, to put in place financial support in relation to the Luxfer Group Pension Plan. Liabilities imposed under a contribution notice or financial support direction may be up to the difference between the value of the assets of the Luxfer Group Pension Plan and the cost of buying out the benefits of members and other beneficiaries of the Luxfer Group Pension Plan. The Pension Schemes Act 2021 further strengthened regulation in this area and includes new criminal and civil penalties for breaches in pensions law (including unlimited fines) and new notifiable events that apply to certain corporate transactions which have the potential to adversely affect the security of the pension plan and therefore increase the likelihood of a contribution notice. In practice, the risk of a contribution notice being imposed may restrict our ability to restructure or undertake certain corporate activities. Additional security may also need to be provided to the Trustee of the Luxfer Group Pension Plan before certain corporate activities can be undertaken (such as the payment of an unusual dividend), and any additional funding of the Luxfer Group Pension Plan may have a material adverse effect on our financial position and cash flows.
Our operations may prove harmful to the environment resulting in reputational damage and clean-up or other related costs.
We are exposed to substantial environmental costs and liabilities, including liabilities associated with divested assets and prior activities performed on sites before we acquired an interest in them. Our operations, including the production and delivery of our products, are subject to a broad range of continually changing environmental laws and regulations in each of the jurisdictions in which we operate. These laws and regulations increasingly impose more stringent environmental protection standards on us with respect to, among other things, air emissions, wastewater discharges, the use and handling of hazardous materials, noise levels, waste disposal practices, soil and groundwater contamination and environmental clean-up. Complying with these regulations involves significant and recurring costs.
We cannot predict our future environmental liabilities and cannot assure investors that our management is aware of every fact or circumstance regarding potential liabilities, or that the amounts provided and budgeted to address such liabilities will be adequate for all purposes. In addition, future developments, such as changes in regulations, laws or environmental conditions, may result in reputational damage or increase environmental costs and liabilities that could have a material adverse effect on our results of operations, financial position and cash flows.
Regulatory approvals, certifications and export controls could limit our ability to sell products, enter markets or expand operations
Certain aspects of our operations are in highly regulated industries requiring product approvals, certifications and ongoing compliance. Requirements may vary across jurisdictions and can change over time. Delays in obtaining approvals, loss of certifications, changes in standards, or non-compliance could prevent us from selling products, entering markets, or expanding product lines and could subject us to penalties or other sanctions. We are also subject to export and import regulations with respect to certain products and materials.
Certain aspects of our operations are highly regulated by different agencies that require products to comply with their rules and procedures and can subject our operations to penalties or adversely affect production.
Certain aspects of our operations are in highly regulated industries that require us to maintain regulatory approvals and, from time to time, obtain new regulatory approvals from various countries. This can involve substantial time and expense. In turn, higher costs of compliance reduce our cash flows from operations. For example, manufacturers of gas cylinders throughout the world must comply with high local safety and health standards and obtain regulatory approvals in the markets in which they sell their products. Furthermore, military organizations require us to comply with applicable government regulations and specifications when providing products or services to them directly or as subcontractors. In addition, we are required to comply with U.S. and other export regulations with respect to certain products and materials. The E.U. has also passed legislation governing the registration, evaluation and authorization of chemicals, known as REACH, pursuant to which we are required to register chemicals and gain authorization for the use of certain substances. Following the U.K.’s withdrawal from the E.U. and the subsequent transition period, the E.U. REACH Regulation has been brought into U.K. law, and REACH, and related legislation, have therefore been replicated in the U.K. In the U.S., there is similar legislation under the Toxic Substance Control Act 1976 ("TSCA") which was substantially amended in 2016. Although we make reasonable efforts to obtain all licenses and certifications that are required by countries in which we operate, there is always a risk that we may be found not to comply with certain required procedures. This risk grows with increased complexity and variance in regulations across the globe. As regulatory plans vary by country, we may also be subject to regulations of which we are not presently aware and could be subject to sanctions by a foreign government that could materially and adversely affect our operations in the relevant country.
Governments and their agencies have considerable discretion to determine whether regulations have been satisfied. They may also revoke or limit existing licenses and certifications or change the laws and regulations to which we are subject at any time. If our operations fail to obtain, experience delays in obtaining, or lose a needed certification or approval, we may not be able to sell products to our customers, expand into new geographic markets or expand into new product lines. In addition, new or more stringent regulations, if imposed, could result in us incurring significant costs in connection with compliance. Non-compliance with these regulations could result in administrative, civil, financial, criminal or other sanctions against us, which could have negative consequences on our business and financial position. Furthermore, if we begin to operate in new countries, we may need to obtain new licenses, certifications and approvals.
Our customers are also often subject to similar regulations and risks. We therefore face the risk that our customers may have the demand for their products reduced as a result of regulatory matters that fall outside our direct control. This would in turn reduce demand for our products and have a negative financial impact on our operating results.
Any of these factors could havematerially aand materialadversely adverse impact onaffect our results of operations, financial position and cash flows.
Climate change regulation and evolving disclosure requirements could increase costs and expose us to legal, operational and reputational risks
Our manufacturing processes, and those of many of our suppliers and customers, are energy-intensive and may generate greenhouse gas emissions directly or indirectly. We are subject to existing and evolving climate-related laws, emissions reporting obligations, and market-based mechanisms in the jurisdictions where we operate and sell products. Compliance may require capital investment and ongoing costs, including for monitoring, reporting and verification of emissions data and for emissions allowances or other charges where applicable.
Management's Discussion & Analysis (MD&A)
New heading “Proceeds from sale of businesses”
Removed heading “Uncertainty of demand in certain end-markets”
Removed heading “Impairment charges”
Removed heading “Adjusted EBITDA”
Removed heading “Impairment of goodwill”
Largest changes
“Goodwill is tested at least annually for impairment and is tested for impairment more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. …”see in full comparison
“•$1.9 million of asset impairments and $1.8 million asset relocation, restructuring and other costs in relation to the rationalization of our North American Gas Cylinders businesses to reduce our fixed cost base;”see in full comparison
“The loss in 2024 for Graphic Arts was a result of relatively high magnesium raw material cost amid increased competition. 2023 was significantly impacted by significant material cost inflation resulting in competitive constraints. Magnesium purchase price has reduced throughout 2024, although there is typically a lag before this impact is recognized in the income statement through lower cost of sales.”see in full comparison
Full comparison: every changed paragraph (128)
•our ability to execute our strategic review, including our Graphic Arts business, to safeguard margins and reduce costs;
•fluctuations in the cost and / or availability of raw materials, including Chinese rare earths, labor and energy, as well as our ability to pass on cost increases to customers;
Luxfer Holdings PLC ("Luxfer," "the Company," "we," "our") is a global industrial company innovating niche applications in materials engineering. Luxfer focuses on value creation by using its broad array of technical know-how and proprietary technologies to help create a safe, clean and energy-efficient world. Luxfer's high-performancehigh performance materials, components and high-pressure gas containment devices are used in defense, first response and healthcare, transportation and generalspecialty industrial applications.
Luxfer is a global industrial company innovating niche applications in materials engineering. Luxfer focuses on value creation by using its broad array of technical know-how and proprietary technologies to help create a safe, clean and energy-efficient world. Luxfer's high-performance materials, components and high-pressure gas containment devices are used in defense, first response and healthcare, transportation and general industrial applications.
Key trends and uncertainties regarding our existing business
Uncertainty of demand in certain end-markets
Macro-economic conditions have continued to impact our general industrial end-market with demand remaining soft for products across all segments. We have also experienced variability of demand for certain products in our defense, first response & healthcare end-market, particularly defense applications, including countermeasure flares and flameless ration heaters, although we have seen this improve in the second half of the year. We have been able to navigate these challenges through productivity and cost management initiatives resulting in improved margins. Legal recoveries and effective working capital management contributed to excellent cash conversion and significantly reduced net debt levels.
While the outlook remains uncertain there are some signs of recovery within the industrial and defense end markets within our Elektron segment, which we are well-placed to capitalize on.
•Focus on navigating near-term uncertainties while maintaining strategic discipline for long-term growth;
•Completion of recently launched centers of excellence programs involving footprint optimization, manufacturing excellence through automation and margin improvement;
•Navigating market volatility, tariffs and wider impact from these, including alternative sourcing arrangements for rare earth materials;
•Addressing continuing general macro uncertainty and building resilience into the outlook;
•Ongoing focus on cost control and productivity improvements across the business to drive margin improvement, as well as new product launches to stimulate top line growth;
•Execution of actions identified upon completion of the previously announced expanded and accelerated strategic review, including the divestiture of Graphic Arts and Superform U.S.;
•Execution of selectedselect capital investment projects to support our strategy of profitable growth while maintainingimproving our infrastructure;
•Continued emphasis on operating cash generation and maintaining strong working capital performance; and
•Further improvements in ESG standing through focus on sustainability and on our values of teamworking and accountability; and
•Focus on recruiting, developing anddeveloping, maintaining talent, whileand driving a high-performance culture.
•Continued evaluation of strategic alternatives in response to the strategic review concluded in 2024.
Net sales
Adjusting for foreign exchange tailwinds of $1.7$3.0 million (20232024: $0.3tailwind of $1.7 million), and excluding Graphic Arts sales of $13.4 million (2024: $29.6 million) consolidated net sales have decreasedincreased by 3.6%$5.9 million or 1.6% in 20242025 from 2023.2024. TheLower adverse impact of volumevolumes and unfavorable mix hasreduced accountedsales forby a$0.5 $16.0million, more than offset by $6.4 million reduction in sales, whilefrom the passing throughpass-through of price increases has slightly offset this decrease by $1.2 million.increases.
Excluding Graphic Arts, sales in our Specialty Industrial and Defense, First Response and Healthcare end market have increased by 11.9% and 2.9% respectively, whilst our sales in our Transportation end market have decreased by 4.8%.
While sales in our General Industrial and Transportation end markets have decreased by 9.2% and 5.7% respectively, our sales in our Defense, First Response and Healthcare end market have increased by 2.7%.
OverallRevenue saleswas have been negativelypositively impacted byfrom:
•Significant decrease in demand for zirconium products, particularly those used in automotive catalysis products;
•Lower sales of both commercial and defense aerospace alloys;
•Reductions in sales of chemical response kits following increased activity in the prior year clearing order backlogs;
•Lower sales for Alternative Fuel cylinders following lower demand in North America; and
•Decreased demand for photo-engraving plates.
These decreases were partially offset by:
•IncreasedStrong sales of flamelessMeals ration heaters for meals readyReady to eatEat (MREMREs) and ofUnitized ourGroup new unitized ration productRations ("UGR-E") ;
•Strong sales of magnesium alloys, particularly those used in automotive applications; and
•StrongerGreater demand for SCBA cylinders as well as cylinders used inmagnesium aerospace applications.alloys;
•Increased sales of magnesium powders for both commercial and defense use; and
•Higher demand for cylinders used in aerospace and space exploration projects.
These increases have been partially offset by:
•Significant reduction in Alternative Fuel cylinder sales, as well as those used for SCBA and medical purposes; and
•Decrease in sales of zirconium powders, specifically those used for automotive catalysis.
TheExcluding 3.0Graphic Arts there was a 0.8 percentage point increase in gross profit as a percentage of sales in 20242025 from 20232024. This increase was primarily the result of contractpositive renegotiationsales mix, pricing discipline and manufacturingcontinued efficienciesoperational havingexecution aacross positiveend impact on margins within the Gas Cylinders and Elektron Divisions respectively. This has beenmarkets, partially offset by adversethe volumeimpact of higher fixed costs in the Elektron division linked to increased volumes and mix.infrastructure investment.
Excluding Graphic Arts, SG&A costs as a percentage of sales have increased by 0.5 percentage points in 2025 from 2024.
SG&A costs as a percentage of sales are relatively flat, having increased by 0.3 percentage points in 2024 from 2023. SG&A costs in 2023 included $5.9 million of legal costs in the Elektron Division. This activity relates to the legal case described in Note 22.
ResearchExcluding Graphic Arts, research and development costs as a percentage of sales remained flat in 20242025 whenfrom compared to 2023 the overall spend of $4.4 million continues to show our commitment to new product development.2024.
The $9.0 million restructuring charges in 2025 predominantly relates to costs aimed at reducing our fixed cost structure and generating savings through enhanced operational alignment, in particular to centralize our North American gas cylinders and magnesium powders businesses. We ceased manufacturing at our Pomona, California facility in December 2025.
As part of this initiative, we recognized impairment charges of $3.8 million related to property, plant and equipment in accordance with ASC 360, and $1.9 million related to right-of-use assets from operating leases in accordance with ASC 842, which applies the long-lived asset impairment model in ASC 360. The impairments were triggered by a strategic decision to relocate operations, resulting in the affected assets no longer being used for their originally intended period. Asset impairments of $0.8 million were recognized in relation to inventory to reflect inventory no longer recoverable as part of the relocation.
The $4.7remaining $2.5 million restructuring chargescharge inrelated 2024to includes:severance and other costs.
•$1.9 million of asset impairments and $1.8 million asset relocation, restructuring and other costs in relation to the rationalization of our North American Gas Cylinders businesses to reduce our fixed cost base;
•$0.1 million gain on disposal of Luxfer Gas Cylinders France site, offset by $0.9 million of costs incurred in relation to its closure; and
•$0.2 million of waste clean up costs in the Elektron division in relation to the consolidation of production facilities in the Magnesium Powders operations.
Impairment charges
The $12.7 million impairment charges incurred in 2023 arose from fully writing down property, plant and equipment and right of use assets from operating leases within our Graphic Arts division as a result of our annual impairment and strategic review.
AcquisitionDisposal and disposalsrelated costs
On July 2, 2025, the Company completed the divesture of its Graphic Arts business to Vulcan Metals Specialty Products, Inc., a newly created affiliate of TerraMar Capital LLC. Graphic Arts was previously reported as a separate operating segment under ASC 280.
The Company recognized a net loss on held-for-sale asset group of $1.9 million. Additional costs of $0.1 million represent professional fees incurred prior to the completion of the disposal of the Graphic Arts business.
In 2024 acquisition and disposal related costs of $12.2 million were incurred in relation to the divestiture of our Graphic Arts segment. $9.8 million represents a loss on held-for-sale asset group to reflect its fair value at that time and $2.4 million represents professional fees. No acquisition and disposal related costs were incurred during 2023.
Other Income(Costs) / income
Other Income of $7.7 million in 2024 relates to the recovery of legal costs from our insurer related to the previously disclosed US Ecology case, (see Note 2220). Historically the legal costs relating to this case were in selling, general and administrative expenses. There was no other income in 2023.
In 2025, other costs of $0.8 million relate to fees incurred in relation the Company’s ongoing strategic review.
The $6.1 million gain on disposal recognized in 2024 was in relation to the sale of previously disclosed held-for-sale land and buildings in our Elektron division. Net consideration of $7.3 million was received in the fourth quarter of 2024. There was no gain on disposal of assets held for sale in 2023.
Net interest expense of $3.1 million in 2025 decreased from $5.2 million in 2024 decreasing from $6.3 million in 2023 primarily due to the lower average drawings on the revolving credit facility.
The defined benefit pension credit of $1.6$1.3 million in 2024,2025 is in relationrelates to the U.K. plan.plan and was broadly consistent with the $1.6 million credit recognized in 2024.
What changed in the latest 10-Q
Risk Factors
New heading “Risks Related to the Transaction”
New heading “If the Transaction does not close, or is delayed, we may experience financial and operational disruptions. In addition our stock price may decline if the Transaction is perceived as uncertain to close.”
New heading “Lawsuits may be filed against us and the members of the Company Board arising out of the proposed Transaction, which may delay or prevent the proposed Transaction or otherwise negatively affect our business and operations.”
Largest changes
“Putative shareholder complaints, including shareholder class action complaints, and other complaints may be filed against us, the Company Board and others in connection with the transactions contemplated by the Transaction Agreement. The outcome of any such litigation is uncertain, and we may not be successful in defending against any such future claims. …”see in full comparison
“Lawsuits may be filed against us and the members of the Company Board arising out of the proposed Transaction, which may delay or prevent the proposed Transaction or otherwise negatively affect our business and operations.”see in full comparison
“If the Transaction does not close, or is delayed, we may experience financial and operational disruptions. In addition our stock price may decline if the Transaction is perceived as uncertain to close.”see in full comparison
“On July 26, 2026, we entered into the Transaction Agreement with Buyer, pursuant to which Buyer will acquire the entire issued share capital of the Company pursuant to the Scheme of Arrangement. The closing of the Transaction is subject to the satisfaction or waiver of certain conditions, many of which are not within our full control. We may be unable to obtain and satisfy, or experience delays in obtaining and satisfying, required regulatory approvals, shareholder approvals, and other closing conditions. …”see in full comparison
Full comparison: every changed paragraph (6)
There have been no material changes from the risk factors previously disclosed in Item 1A. of our 2025 Annual Report on Form 10-K filed with the SEC on February 24, 2026.2026, except as described below.
Risks Related to the Transaction
If the Transaction does not close, or is delayed, we may experience financial and operational disruptions. In addition our stock price may decline if the Transaction is perceived as uncertain to close.
On July 26, 2026, we entered into the Transaction Agreement with Buyer, pursuant to which Buyer will acquire the entire issued share capital of the Company pursuant to the Scheme of Arrangement. The closing of the Transaction is subject to the satisfaction or waiver of certain conditions, many of which are not within our full control. We may be unable to obtain and satisfy, or experience delays in obtaining and satisfying, required regulatory approvals, shareholder approvals, and other closing conditions. In addition, both we and Buyer may terminate the Transaction Agreement for reasons specified therein. The announcement and pendency of the Transaction could adversely affect our business and stock price, including if the Transaction does not close or is delayed, for reasons including the following:
Lawsuits may be filed against us and the members of the Company Board arising out of the proposed Transaction, which may delay or prevent the proposed Transaction or otherwise negatively affect our business and operations.
Putative shareholder complaints, including shareholder class action complaints, and other complaints may be filed against us, the Company Board and others in connection with the transactions contemplated by the Transaction Agreement. The outcome of any such litigation is uncertain, and we may not be successful in defending against any such future claims. Lawsuits that may be filed against us, the Company Board or others could delay or prevent the Transaction from being completed, divert the attention of our management and employees away from our day-to-day business, and otherwise adversely affect our business, results of operations, and financial condition. If the Transaction is not consummated for any reason, litigation could be filed in connection with the failure to consummate the Transaction.
Management's Discussion & Analysis (MD&A)
New heading “Recent Developments”
New heading “Loss on disposal of assets held for sale”
Largest changes
“The defined benefit pension charge was $0.1 million in the second quarter of 2026, compared to a $0.6 million credit in the second quarter of 2025. For the first six months of 2026, the defined benefit pension charge was $0.1 million, compared to a $1.2 million credit in the first six months of 2025. The year-over-year movements primarily reflect lower expected returns on plan assets compared to the prior year periods. …”see in full comparison
“The defined benefit pension credit decreased to $0.0 million for the first quarter of 2026 (2025: $0.6 million credit), primarily reflecting lower expected returns on plan assets compared to the prior year period. In addition, on January 8, 2026, the Trustee of the Luxfer Group Pension Plan entered into a full buy-in contract with an insurer, which is designed to substantially match the Plan’s future benefit obligations with corresponding insurance cash flows. …”see in full comparison
“The $2.3 million restructuring charge in the First Quarter of 2026 relates to the continued execution of restructuring initiatives previously announced, aimed at reducing our fixed cost structure and enhancing operational alignment, including the centralization of our North American gas cylinders and magnesium powders businesses. …”see in full comparison
“The $2.0 million and $1.8 million of restructuring charges recognized in the second quarter and first six months of 2025, respectively, predominantly related to initiatives aimed at reducing our fixed cost structure and generating savings through enhanced operational alignment, particularly through the reduction of our North American Gas Cylinders footprint. As part of these initiatives, we recognized accelerated depreciation charges of $1.7 million related to property, plant and equipment in the second quarter and first six months of 2025, in accordance with ASC 360. …”see in full comparison
Full comparison: every changed paragraph (50)
This Interim Report on Form 10-Q contains certain statements, statistics and projections that are, or may be, forward-looking.forward-looking, including with respect to the Transaction. These forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause our actual results of operations, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. The accuracy and completeness of all such statements, including, without limitation, statements regarding our future financial position, strategy, plans and objectives for the management of future operations, is not warranted or guaranteed. These statements typically contain words such as "believes," "intends," "expects," "anticipates," "estimates," "may," "will," "should" and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Although we believe that the expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, factors identified in "Business," "Risk factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations," or elsewhere in this Interim Report, as well as:
Recent Developments
On July 26, 2026, the Company entered into the Transaction Agreement with Buyer. Pursuant to the Transaction Agreement, upon the terms and subject to the conditions set forth therein, Buyer will acquire the entire issued share capital of the Company pursuant to the Scheme of Arrangement. Upon the terms and subject to the conditions set forth in the Transaction Agreement and the Scheme of Arrangement, at the Effective Time, all of the ordinary shares of the Company then outstanding will be transferred from the Company’s shareholders to Buyer, and the Company’s shareholders will be entitled, pursuant to and in accordance with the terms of the Scheme of Arrangement, to receive $17.37 in cash per ordinary share. The Company Board approved and declared the Transaction Agreement, and the transactions contemplated thereby, including the Transaction, the Scheme of Arrangement and the other transactions contemplated thereby fair to and in the best interests of the Company and its shareholders as a whole. See Note 16 of the Notes to Condensed Consolidated Financial Statements for additional information.
The consolidated results of operations for Luxfer in the FirstSecond Quarter of 2026 and 2025 were as follows:
The consolidated results of operations for Luxfer in the first six months of 2026 and 2025 were as follows:
On a comparable basis, excluding the impact of foreign currency movements and sales attributable to Superform and Graphic Arts, net sales decreased by 3.1% in the second quarter and by 5.8% in the first six months of 2026. Foreign currency movements reduced net sales by $0.6 million in the second quarter and increased net sales by $0.6 million in the first six months of 2026. Combined sales of Superform and Graphic Arts for the second quarters of 2026 and 2025 were $2.2 million and $9.5 million and $4.0 million and $17.5 million in the first six months of 2026 and 2025, respectively.
Adjusting for foreign exchange tailwinds of $1.2 million in the First Quarter of 2026, and excluding Graphic Arts sales of $6.5 million in First quarter of 2025, net sales have decreased by 8.6%.
Further to the above, the first six months of 2026 were also significantly affected by lower sales of zirconium products used for pharmaceutical applications and automotive catalysis.
Excluding Superform and Graphic Arts, gross profit as a percentage of sales increased by 2.3 percentage points and 2.5 percentage points in the second quarter and first six months of 2026, respectively, compared to the corresponding periods in 2025. The increases in both periods were primarily the result of pricing actions and cost reduction initiatives, partially offset by adverse sales mix and inflationary cost pressures.
Excluding Graphic Arts there was a 3.7 percentage point increase in gross profit as a percentage of sales in the First Quarter of 2026 from 2025, respectively. This increase was primarily the result of positive pricing and cost discipline.
Excluding Superform and Graphic Arts, SG&A costs as a percentage of sales in the first quarter of 2026 from 2025 have increased by 2.50.7 percentage points,points thisand 0.9 percentage points in the second quarter and first six months respectively. This is a result of inflationary cost rises and lower sales in the quarter as explained above.
Excluding Superform and Graphic Arts, research and development costs as a percentage of sales in the First Quarter of 2026 from 2025 increased by 0.6 percentage points,points alsoin both the second quarter and first six months of 2026 compared to the corresponding periods in 2025, primarily as a result ofan the lower salesincrease in themagnesium quarter.alloy R&D activities.
The $2.3 million restructuring charge in the First Quarter of 2026 relates to the continued execution of restructuring initiatives previously announced, aimed at reducing our fixed cost structure and enhancing operational alignment, including the centralization of our North American gas cylinders and magnesium powders businesses. These charges comprise $2.2 million within the Gas Cylinders segment and $0.1 million within the Elektron segment, primarily relating to follow-on costs associated with the cessation of manufacturing at our Pomona, California facility in December 2025, including equipment relocation, site reorganisation, employee stay incentives and site remediation activities, as well as minor shutdown costs associated with the magnesium powders business.
The $0.1$1.6 million and $3.8 million of restructuring charges recognized in the Firstsecond Quarterquarter and first six months of 2025,2026, alsorespectively, predominantly relatedrelate to coststhe continued execution of previously announced restructuring initiatives aimed at reducing our fixed cost structure and realigningenhancing theoperational business.alignment, including footprint consolidation projects impacting both North American gas cylinders and magnesium powders operations.
The $2.0 million and $1.8 million of restructuring charges recognized in the second quarter and first six months of 2025, respectively, predominantly related to initiatives aimed at reducing our fixed cost structure and generating savings through enhanced operational alignment, particularly through the reduction of our North American Gas Cylinders footprint. As part of these initiatives, we recognized accelerated depreciation charges of $1.7 million related to property, plant and equipment in the second quarter and first six months of 2025, in accordance with ASC 360. These charges resulted from the strategic decision to relocate certain operations, which shortened the expected useful lives of the affected assets.
Disposal related costs of $0.1 million in the second quarter and first six months respectively of 2025 were incurred in relation to the divestiture of our Graphic Arts segment.
Loss on disposal of assets held for sale
Loss on held-for-sale asset group decreased by $2.8 million in both the second quarter and first six months of 2026 compared to the corresponding periods in 2025. In the second quarter of 2025, the Company recognized a $2.8 million loss related to the Superform asset group to adjust its carrying amount to estimated fair value less costs to sell, reflecting revised expectations regarding the sale. No comparable charge was recognized in 2026.
In the second quarter and first six months of 2026, other costs of $1.2 million and $1.8 million, respectively, comprised primarily legal and due diligence fees, together with financial advisory and other professional fees, incurred in connection with the Company’s strategic review and related transaction process.
The defined benefit pension credit decreased to $0.0 million for the first quarter of 2026 (2025: $0.6 million credit), primarily reflecting lower expected returns on plan assets compared to the prior year period. In addition, on January 8, 2026, the Trustee of the Luxfer Group Pension Plan entered into a full buy-in contract with an insurer, which is designed to substantially match the Plan’s future benefit obligations with corresponding insurance cash flows. While the buy-in does not constitute a settlement event under ASC 715 and therefore did not result in a remeasurement of the Plan’s funded status during the quarter, it has the effect of reducing future variability in pension income. Costs of $0.1 million were incurred in connection with the buy-in during the period, which offset the underlying pension credit.
Net interest expense ofincreased $0.7by $0.1 million, or 11.1%, to $1.0 million in the FirstSecond Quarter of 2026 decreased 12.5% from $0.8$0.9 million in the FirstSecond Quarter of 2025, primarily due to ahigher decreaseborrowings incurred in averagerelation to higher inventory levels as we executed footprint consolidation projects. Net interest rateexpense onwas drawings.$1.7 million in both the first six months of 2026 and 2025.
The defined benefit pension charge was $0.1 million in the second quarter of 2026, compared to a $0.6 million credit in the second quarter of 2025. For the first six months of 2026, the defined benefit pension charge was $0.1 million, compared to a $1.2 million credit in the first six months of 2025. The year-over-year movements primarily reflect lower expected returns on plan assets compared to the prior year periods. In addition, on January 8, 2026, the Trustee of the Luxfer Group Pension Plan entered into a full buy-in contract with an insurer, which is designed to substantially match the Plan’s future benefit obligations with corresponding insurance cash flows. While the buy-in does not constitute a settlement event under ASC 715 and therefore did not result in a remeasurement of the Plan’s funded status, it has the effect of reducing future variability in pension income. Costs of $0.2 million and $0.3 million were incurred in connection with the buy-in during the second quarter and first six months of 2026, respectively, which offset the underlying pension credit.
The $0.6 million decrease in the defined benefit pension credit to $0.0 million in 2026 from $0.6 million in 2025 is primarily due to the effect of lower projected asset returns, additionally in 2026, the Company incurred $0.1 million of costs in connection with the pension buy-in.
The movement in the year to date statutory effective tax rate from 25.7%34.1% in 2025, to 30.9%29.4% in 2026, was primarily due to non-deductible expenses.expenses in both years.
The following tables of non-GAAP summary financial data presentspresent a reconciliation of net income from continuing operations and diluted earnings per ordinary share from continuing operations to adjusted net income from continuing operations,income, adjusted EBITA from continuing operations,EBITA, adjusted income from continuing operations before income taxes, adjusted EBITDA from continuing operations, adjusted EBITDA excluding legal cost recovery,EBITDA, adjusted earnings per ordinary share from continuing operations,share, adjusted provision for income taxes and adjusted effective tax rate from continuing operations,rate, for the periods presented, being the most comparable GAAP measures. Management believes that adjusted net income excluding legal cost recovery,income, adjusted earnings per share, adjusted EBITA and adjusted EBITDA excluding legal cost recovery are key performance indicators ("“KPIs"”) used by the investment community and that such presentation will enhanceenhances an investor’s understanding of the Company's operational results. In addition, Luxfer's CEO and other senior management use these KPIs, among others, to evaluate business performance. However, investors should not consider adjusted net income from continuing operations,income, adjusted earnings per share from continuing operations,share, adjusted EBITA from continuing operations andor adjusted EBITDA excluding legal cost (recovery) from continuing operations in isolation or as an alternativealternatives to net income and earnings per share when evaluating Luxfer's operating performance or measuring Luxfer's profitability. In 2024, the Company initiated a process to divest the Graphic Arts business which was concluded in July 2025. While Graphic Arts did not meet the 'strategic shift' criteria outlined in ASC 205-20 for it to be classified as a discontinued operation, management believed it is appropriate in the tables below to separate out the results of Graphic Arts in order to provide a more complete financial summary for the period.
In 2024, the Company initiated a process to divest the Graphic Arts business, which was concluded in July 2025. While Graphic Arts did not meet the “strategic shift” criteria outlined in ASC 205-20 for classification as a discontinued operation, management believes it is appropriate to separately present the results of Graphic Arts in the tables below to provide a more complete financial summary for the periods presented.
During the second quarter of 2026, the Company ceased actively marketing the Superform business for sale and, as a result, Superform no longer met the criteria for classification as held for sale or discontinued operations. The decision to cease active marketing reflected, in part, improved performance supported by stronger conditions in the aerospace market. Prior-period amounts in the tables below have been restated to reflect Superform within continuing operations and its separate presentation in these tables. Notwithstanding this change in classification, management continues to consider Superform to be a non-core business. Accordingly, the tables below separately present the results of Superform to provide investors with greater transparency regarding the performance of the Company’s core continuing operations.
The summary that follows provides a discussion of the results of operations of our reportable segments, Gas CylindersCylinders, Elektron and Elektron.Superform. The Graphic Arts business was sold on July 2, 2025 and is therefore excluded from the current period discussion.
Adjusted EBITA, which is our segment income metric, represents net income from continuing operations adjusted for share-based compensation charges, restructuring charges, impairmentloss charges,on disposal of assets held-for-sale, disposal costs, other costs, net interest expenses, defined benefit pension charge / credit, provision for taxes and amortization. A reconciliation to pre-tax income can be found in Note 14 to the condensed consolidated financial statements. Adjusted EBITDA, as shown below, represents adjusted EBITA less depreciation. Management believes that adjusted EBITA and adjusted EBITDA are key performance indicators ("KPIs") used by the investment community and that such presentation will enhance an investor’s understanding of the Company's operational results. Adjusted EBITDA is reconciled to adjusted EBITA above.
The results of operations from the Gas Cylinders segment are for continuing operations only.
The 1.7% increasedecrease in Gas Cylinders sales in the Firstsecond Quarterquarter of 2026 from 2025,2025 was primarily the result of increase inlower sales of AFcylinders cylindersserving space exploration programs and SCBA cylinders, partially offset by lowerstrong demand for industrial cylinders and increased sales of SCBAAlternative Fuel (“AF”) cylinders.
Further to the above, sales in the first six months of 2026 decreased by 0.1%, with strong demand for industrial and AF cylinders substantially offsetting lower sales of SCBA cylinders, aerospace cylinders serving space exploration programs and cylinders used in aircraft safety systems.
The 1.6 percentage point decrease in adjusted EBITA for Gas Cylinders as a percentage of net sales in the second quarter of 2026 compared to 2025 was primarily the result of adverse sales mix and inflationary cost pressures, partially offset by pricing actions and cost reduction initiatives. For the first six months of 2026, adjusted EBITA as a percentage of net sales increased by 0.6 percentage points, as the benefits of pricing actions and cost reduction initiatives more than offset adverse sales mix and inflationary cost pressures.
The 2.1 percentage point increase in adjusted EBITA for Gas Cylinders as a percentage of net sales in the First quarter of 2026 relative to 2025 is predominantly the result of pricing discipline.
The 14.8%5.6% decrease in Elektron sales in the Firstsecond quarter of 2026 from 2025 was primarily the result of reducedlower sales of zirconiumflameless powdersration usedheaters for pharmaceuticalMeals productsReady to Eat (“MREs”), RotaMag® magnesium alloys and automotivezirconium catalysis, these wereproducts, partially offset by strongincreased sales of magnesium powders for defense use and magnesium aerospace alloys.
Further to the above, the 10.2% decrease in sales in the first six months of 2026 was also significantly affected by lower sales of zirconium products used for pharmaceutical applications.
The 2.31.9 percentage point increaseand 2.0 percentage point increases in adjusted EBITA for Elektron as a percentage of net sales in the Firstsecond quarter and first six months of 20262026, relativerespectively, compared to the corresponding periods in 2025 iswere predominantlyprimarily the result of positivepricing pricingactions and cost discipline.reduction initiatives, partially offset by adverse sales mix and inflationary cost pressures.
Adjusted EBITDA was affected for the same reasons as adjusted EBITA.
SUPERFORM
The net sales, adjusted EBITA and adjusted EBITDA for Superform were as follows:
The 15.4% decrease in Superform sales in the second quarter of 2026 from 2025 was primarily the result of lower sales of components serving defense aerospace, automotive and rail applications, partially offset by increased sales of components serving commercial aerospace applications.
Further to the above, sales in the first six months of 2026 decreased by 2.4%, as increased sales of commercial aerospace components and tooling were more than offset by lower sales of components serving defense aerospace, automotive and rail applications.
The 11.2 percentage point and 5.0 percentage point increases in adjusted EBITA for Superform as a percentage of net sales in the second quarter and first six months of 2026, respectively, compared to the corresponding periods in 2025, were primarily the result of a more favorable sales mix, together with lower manufacturing fixed costs and improved production cost performance.
Our liquidity requirements arise primarily from obligations under our indebtedness, capital expenditures, acquisitions, the funding of working capital and the funding of hedging facilities to manage foreign exchange and commodity purchase price risks. We meet these requirements primarily through cash flows from operating activities, cash deposits and borrowings under the Revolving Credit Facility and accompanying ancillary hedging facilities and the Loan Note due in 2026.facilities. Our principal liquidity needs are:
We believe that, in the long term, cash generated from our operations will be adequate to meet our anticipated requirements for working capital, capital expenditures and interest payments on our indebtedness. In the short term, we believe we have sufficient liquidity and available credit facilities to meet our requirements,requirements. includingIn June 2026, the repaymentCompany ofrepaid the $25.0 million Loan Note dueat inmaturity June 2026. The Company expects to fund this repayment throughusing drawings under its Revolving Credit Facility,Facility. whichAs of June 28, 2026, the Revolving Credit Facility had available headroom of $91.5$65.8 million as of March 29, 2026.million. In July 2025, we completed a refinance of our shelf facility, with terms remaining substantially unchanged and maturity extended to July 2030.
We have been in compliance with the covenants under the Loan Notes and the Senior Facilities Agreement and, prior to its repayment in June 2026, the Loan Notes throughout all of the quarterly measurement dates from and including September 30, 2011, to MarchJune 29,28, 2026.
Cash fromused by operating activities in the Firstfirst Quartersix months of 2026 was a $4.1$1.4 million outflow compared to a $5.2$6.6 million inflow in 2025. The movementIt was primarily therelated resultto net income from operating activities, net decreases in working capital, and net of increased working capital in 2026. Cash flow in 2025 was positively impacted by the $1.9following millionnon-cash receiptitems: arisingdepreciation fromand theamortization; reimbursementshare-based ofcompensation legalcharges; costspension incredit; relationloss on held-for-sale asset group and net changes to theassets previouslyand disclosed US Ecology case.liabilities.
Net cash used by investing activities was $2.0$4.7 million for the Firstfirst Quartersix months of 2026, compared to net cash used by investing activities of $1.2$3.3 million in 2025. Capital expenditure increased by $0.8$1.4 million in the Firstfirst Quarter.six months.
In the Firstfirst Quartersix months of 2026, net cash provided by financing activities was $12.6$9.2 million, (2025: $4.2$3.2 million used by financing activities). We had net drawdowns of $18.3$44.5 million on our revolving credit facility and repaid $25.0 million of loan notes (2025: $2.0$0.6 million repaymentdrawdown of overdraft and $2.2$4.9 million drawdown on our revolving credit facility). Dividend payments of $3.5$6.9 million (2025: $3.5$7.0 million), equating to $0.13$0.26 per ordinary share respectively and we paid out $1.5$2.0 million, (2025: $0.4$0.6 million) in settling share based compensation and $0.7$1.4 million, (2025: $0.5$1.1 million) in repurchasing our own shares as part of the share buyback program which equates to 50,000100,000 shares (2025: 40,00090,000 shares). We have suspended repurchases of our ordinary shares under the share buyback program pending consummation of the Transaction.
At MarchJune 29,28, 2026, we had no off-balance sheet arrangements other than the bonding facilities disclosed in Note 15.
LXFR insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 5 filings (5 insiders, 1 trade date, 21,368 shares, about $321.6K). Net open-market shares: -21,368 (purchases minus sales); net value about -$321.6K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-11 | Hipple Richard J |
Option exercise | 8,953 | — | — |
| 2026-06-11 | Hipple Richard J |
Open-market sale | 4,010 | $15.05 | $60.4K |
| 2026-06-11 | Trimberger Lisa G |
Option exercise | 8,953 | — | — |
| 2026-06-11 | Trimberger Lisa G |
Open-market sale | 4,010 | $15.05 | $60.4K |
| 2026-06-11 | Stein Sylvia Ann |
Open-market sale | 4,010 | $15.05 | $60.4K |
| 2026-06-11 | Stein Sylvia Ann |
Option exercise | 8,953 | — | — |
| 2026-06-11 | Snowdon Clive |
Option exercise | 8,953 | — | — |
| 2026-06-11 | Snowdon Clive |
Open-market sale | 4,015 | $15.05 | $60.4K |
| 2026-06-11 | Mullen Patrick K |
Option exercise | 11,851 | — | — |
| 2026-06-11 | Mullen Patrick K |
Open-market sale | 5,323 | $15.05 | $80.1K |
| 2026-05-06 | Butcher Andrew |
Other | 853 | $15.82 | $13.5K |
| 2026-02-04 | Butcher Andrew |
Other | 853 | $15.68 | $13.4K |
| 2025-12-19 | Butcher Andrew |
Other | 508 | $13.79 | $7.0K |
| 2025-11-05 | Butcher Andrew |
Other | 1,068 | $12.39 | $13.2K |
Well-known investors holding LXFR (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 462,847 | $8.3M | 0.0% | Reduced 6% |
| Two Sigma Investments | 2026-06-30 | 346,312 | $6.2M | 0.0% | Reduced 3% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 326,110 | $5.9M | 0.0% | Added 19% |
| First Eagle Investment Management | 2026-06-30 | 157,500 | $2.8M | 0.0% | Reduced 47% |
| Millennium Management (Israel Englander) | 2026-06-30 | 112,150 | $1.4M | — | Sold out |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 35,344 | $637.6K | 0.0% | Reduced 22% |
| D. E. Shaw & Co. | 2026-06-30 | 30,365 | $547.8K | 0.0% | New position |
| Renaissance Technologies | 2026-06-30 | 28,558 | $515.2K | 0.0% | Reduced 64% |